Solving Problems Across City Borders: Opportunities and Challenges to Regional Planning in China

China is known for having a strong central government. In many ways, this perception is very true. Unlike countries like the United States which clearly delineate federal and local (state) powers, all governmental authority in China flows from the central government. Over the past several decades, however, the central government has gradually delegated power down to local governments. Local governments now have significant decision-making authority when developing policies.

Though decentralization has spurred economic growth, it has also brought challenges. In particular, there has been a rise in local protectionism, with local government officials focusing on growth in their own municipalities at the expense of surrounding areas.

The Chinese government increasingly needs to balance the priorities of central and local governments. Furthermore, many problems, including environmental protection, are just handled better on a regional rather than city level. As such, there has been significant growth in the rise of regional plans over the past decade.

Benefits of Regional Plans

When developing regional plans, policymakers look at existing and projected resources within a region (including people, natural resources, infrastructure, and industries) and analyze the opportunities and challenges that will shape the region’s growth in the future. Both regional and local leaders use this information to develop policies that limit redundancies, encourage cooperation, and maximize the potential of regions. Regional governments can both help create these regional plans by bringing nearby city officials together and can, in theory, help implement these plans.

Regional planning can prevent a “race to the bottom.” For example, if one city implements environmental protection measures that increases the cost of development, neighboring cities may view this as an opportunity to attract developers with their lower environmental standards and costs. This can lead to a chilling effect for the implementation of environmental protection policies. Strong regional governance can limit this effect by ensuring that nearby cities implement similar policies and play by the same environmental rules.

Regional governments can handle problems at scales beyond the city level. If a major city like Beijing forces factories within its city limits to close because the factories produce too much air pollution, these factories don’t necessarily shut down forever. They may move to nearby cities with more lax air pollution policies. In cases like this, the net pollution produced in an area will not decrease; it moves to other areas. By tackling problems at the regional level, the Chinese government can make meaningful strides towards addressing larger goals.

Regional economic planning encourages the clustering of talent in ways that build the greatest economic good for an entire region rather than one area. When industrial clusters grow in a city, the cost of growth for companies decreases as the supply of trained workers and the infrastructure necessary for that industry to thrive increases. This theory has been used to explain the development of Silicon Valley and other major innovation hubs. By developing distinct roles for cities within a region and decreasing intra-regional competition for industries, Chinese regions can develop these specialized regions necessary to compete in the global marketplace.

Challenges to Regional Integration

There is growing evidence which indicates Chinese leadership understands the importance of regional governance. President Xi is a strong supporter of the Jing-Jin-Ji regional area (Beijing, Tianjin, and the surrounding Hebei region). Regional authorities in the Pearl River Delta and Yangtze River Delta also show that Chinese leaders are thinking regionally.

Though regional plans and regional governments are popping up across China, the authority of these organizations is still unclear. There is little evidence to suggest that these regional plans and regional governments possess the carrots and the sticks necessary to work effectively.

Regional plans are designed so that everyone in a region is better off for participating; however, these plans often require concessions from local governments. A city may benefit from improved air quality and interconnected transportation due to region-wide planning and policies; this same city may also be required to limit its recruitment of desirable industries so that other cities within the same region can develop economies of agglomeration. For many local governments, the incentives (i.e. carrots) for participating in these regional plans just aren’t great enough. Local officials may balk at policies that limit their cities’ growth potential despite the potential environmental and quality-of-life benefits of regional planning.

Perhaps more importantly, regional governments have few methods to punish cities and leaders who are unwilling to follow regional plans. If city officials refuse to follow regional plans, regional plans and the benefits that come with them will quickly fall apart. Without the tools necessary to keep cities in line, even the best regional plans will have very limited success.

Moving Forward

Urbanization in China has brought about massive challenges that leaders across all levels of government will have to work together to resolve. Regional governments can play an important role in balancing conflicting goals between local governments. However, China will have to take major steps to empower these regional governments.

First, China needs to formally include regional governments in its governmental structure. Second, it must provide these regional governments with the authority to keep cities participating in regional plans.

Though the decentralization from central to local governments has spurred economic growth, cities aren’t capable of tackling large issues like environmental protection on their own. With the emergence of regional plans across China, the Chinese government has shown that it recognizes the importance of solving problems on a regional level. It remains an open question whether these regional governments possess the carrots and sticks necessary to implement these regional plans.

May -There appears to be some confusion here. The article is talking about horizontal regional governance. This is something new for China, some areas are taking the lead. However, when it comes to vertical regional governance China is a world leader. Most advanced systems that use regional governance have both vertical and horizontal systems.

Smart countries know that regional governance boosts local economies. You can see contrast in US where rust belts are growing;and in Europe where regional governance has helped to transform economies, for example the Ruhr and Eindhoven.ReplyCancel

May -County level cities are regional systems, so are prefecture level cities and provincial level cities. In fact the last two types contain regional systems within regional systems.

So what regional governance do you mean? Seems to me this article is about the need for horizontal systems.ReplyCancel

Daniel Hedglin -Hi May,

When I speak about regional governance, I am primarily referring to a level of government that would be below the provincial level but above the local level. In particular, I am referencing Chinese attempts at regional governance in the Jing-Jin-Ji area, the Pearl River Delta area, and the Yangtze River Delta area.

I think there is great importance in improving horizontal cooperation across cities and even provinces. Problems quite often are too complicated to handle at local levels, and regional governance would help in these situations!ReplyCancel

May -US is highly fragmented. By contrast Chinese cities are integrated, so they have regional governance. They changed their system during the Reform period. Chinese systems are more like Tokyo and Seoul;but go much beyond that to include systems within systems for instance a provincial city can include regional systems and within them county systems. These are vertical systems.
Now consider in France, they have regions, departments and communes. That is the French vertical system. Then they have inter communal cooperation bodies, urban communities, and the new metropoles. These are horizontal bodies. The vertical bodies in China are generally deeper than European and Western systems. But you have to consider the fact that China has many more people.
China also has insitu urbanization and the leading province for that is Jiangsu. This happened because of rich villages, which happened because of its successful township and village enterprises.
In developing countries, nonagricultural income sources are the need of the hour.ReplyCancel

May -By the way, Turkey also add regional governance integrated local governance)to meet EU requirements. Its urban systems are vertical and now it is enjoying its fruits. In fact, it wants to increase number from 16 to 29! Four Turkish cities (metropolitan municipalities)in top 10 of latest Brookings list:
“Four Turkish cities made the top 10: Izmir, Istanbul, Bursa and Ankara.”http://www.theguardian.com/ business/2015/jan/22/china- best-performing-economic- cities
In race for best economy, China handily beats Houston, London and other Western cities

Its horizontal systems were introduced in 1960s are basically service sharing systems.ReplyCancel